NAB Goes OTT

Monday April 26, 2010 – Antonette Goroch

Over-the-Top (OTT) content, referring to content delivered to the TV over the Internet, exclusive of any pay TV content package was as hot a topic as was 3D at the recent NAB show and well it should have been. The trend is causing plenty of hand wringing and opportunity searching – a sure sign of big business shifts to come.

The trend was well illustrated with the current wave of Internet connected CE devices, such as TVs, STBs and virtually every other device with some connection to the television, on display on the show floor. Fear of piracy and lost revenues had previously kept content providers from allowing quality brands and shows outside the walled gardens of pay TV systems, but with the convergence of TV and Internet now a mainstream reality, attitudes are changing—and threatening those very same walled gardens with new competition.

Indeed, over the past year, major content providers, such as NBC Universal, Fox Broadcasting Co., CBS Corp., and ABC Inc. have shown themselves to be both willing and able to take advantage of OTT through sites such as Hulu and YouTube, as well as content hosted through their own sites via services such as Veoh Networks--pushing Internet video usage to new heights. Many in the industry are quick to brush this “threat” off, saying that OTT content isn’t an adequate replacement for multichannel pay TV packages in either breadth or quality of service.

But such pronouncements miss the point: The landscape for the delivery of television content is changing, and both business models and value chains will change along with it, like it or not.

There are a handful of pay TV operators rising to the challenge, seeking to forestall their own obsolescence through initiatives that integrate OTT as part of the pay TV experience. Examples include several European operators, such as BSkyB (DTH satellite) and Free Telecom (IPTV), who offer “catch up” TV and on-demand access via the Internet to subscribers.

Most of the mature multichannel markets are all ready fairly stagnant in terms of new subscribers, and even a small decrease in subscribership will be costly to pay TV operators already scrambling in a competitive multiplatform environment. It is likely that success will ultimately come to those who can see OTT as a competitive opportunity—not a threat.

iPad is iFun

Monday April 19, 2010 – Stewart Wolpin

A warning to HP and other PC companies with the upcoming Slate tablet PC and other post-iPad tablet PCs: Stop trying to sell your new devices by touting alleged technical superiorities. Resist emphasizing faster processors, array of connecting jacks and memory slots, Flash compatibility, 1080p video playback, built-in cameras/video recorders, and that they run Windows 7.

What HP and Microsoft and all tablet makers to follow have missed is that iPad is not a tablet PC.

Ever since the late and tragically under-appreciated Ed Roberts introduced his MITS Altair personal computer in 1975, the PC has been championed as an enhanced productivity tool. The justification for its purchase has always been something like "It'll help me work faster and easier and better." The iPad, however, may be the first "personal computer" not designed as an enhanced productivity tool. This is why some folks can't figure out what it does – it doesn't "do" anything, at least work-related.

Not that iPad can't be a productivity tool – I'm writing this column on an iPad using Apple's Pages word processing program and mailed the draft to myself using iPad's excellent email program.

But even as I'm writing this, I want to hit the Home key and tap on iBook to continue e-reading James McManus' poker history "Cowboys Full." I want to watch Paul McCartney's "Good Evening New York City" concert I synced from iTunes or stream a movie from my queue on Netflix. I want to touch-surf the Web. I want to play EA's addictive (for a writer, anyway) Scrabble. I want to browse my photos. I want to check the lowlights of yesterday's Mets' loss on MLB.com's At Bat 2010 app (I'm a masochist). I want to do anything but tap tap this column. I want to play.

Rather than enhancing productivity, iPad enhances fun.

If you ask any of the more than half a million iPad purchasers why they bought one, they will do their best hem and haw stammering Ralph Kramden, unable to come up with a fully realized rationalization. Though ultimately unexpressed, they bought it not because they needed it, but because they wanted it. They intuitively knew, given the thousands of available apps and games, the easy touch access and Apple's seamless OS/iTunes/app/hardware integration, that iPad would simply be fun to futz with.

But HP Slate and other Microsoft Windows 7 tablet makers think all they need to do is deliver another enhanced productivity tool, a touchscreen/keyboard-less netbooks, yet another enhanced productivity tool in another form factor, to compete with iPad. Touch will make Slate perhaps easier to use, but it won’t likely be described as fun. And that misses the whole point, and why the iPad is a success and why other tablets to come may not be.

HD: Chinese Cable’s Next Big Boom

Monday April 12, 2010 – Antonette Goroch

China, the largest cable market in the world with more than 170 million subscribers total, has come to dominate digital cable STB shipments, having now completed its sixth year of its massive digital transition. Indeed, DTC estimates China made up more than 40% of total worldwide digital cable STB shipments in both 2008 and 2009, and will again in 2010.

Although Chinese cable subscribers are helping to haul in the big numbers, they haven’t done much to advance high-margin services (such as HD, VOD and PVR) or the boxes that receive them. To date, the receivers are almost exclusively low-cost STBs (some have reported per unit prices of under $50), with only basic one-way functionality. Placing digital STBs in the U.S and Western Europe is a higher-margin proposition for suppliers as receivers that can handle HD, VOD and other high-end goodies are common place. But now that the initial infrastructure has been put in place, it’s only a matter of time before Chinese operators begin offering boxes that receive HD and include high-capacity hard drives for PVR services.

Hunan Cable Group, one of the largest Chinese cable operators with more than 5 million subscribers, for instance, became the first to announce this March that it would launch an MPEG-4 AVC based HDTV service in 2010, which will include both HD channels and an extensive VOD library. The two largest domestic STB suppliers, like Coship and DVN, each announced they will soon make available new families of HD STBs that support high-end services and decode video in both MPEG-4 AVC and MPEG-2.

To date the digital cable market has been dominated by domestic suppliers. There’s no doubt that Western STB suppliers would like a slice of the higher-margin STB market especially now that significant market saturation is a reality in the U.S. Western Europe. Whether or not they’ll get it remains to be seen – stay tuned.

It's a Bird, It's a Bird, It's a Plane, It's Superphone!

Monday April 5, 2010 – Stewart Wolpin

Apple has been the superstar the last few years when it comes to rolling out truly innovative communications products but it looks like it has some competition after the unveiling of show-stopping superphones at the recently concluded CTIA gathering.

These new devices, coupled with improved operating systems and large 4-plus-inch screens, speedy processors, accelerometers, HD recording and playback, and high-speed video streaming capabilities, are likely to inflict healthy damage on the portable media and game player categories, as iPhone is already managing to do. In other words, these are likely the next game changers.

Android seems to be the superphone OS of choice. There are now more than a dozen Android models from all four national carriers, and developers seem to be having more fun writing for them thanks to the openness of the Android OS and the multitasking capabilities of the phones. But super BlackBerrys are sure to follow, as will phones running the new Windows Mobile 7 OS, which completely shakes up the icon/app-driven iPhone/Android user interface paradigm. The next superphone rollouts that took starring roles at CTIA, are coming from HTC and Samsung

This doesn't mean Jobs is sitting on his iPads. Stories already are circulating about the next version of the iPhone OS, 4.0, which will add multitasking capabilities. iPad runs on Apple's own 1 GHz A4 Arm processor, which likely will power the iPhone HD (as it's been dubbed) due sometime later this summer, with a more powerful 1.2 GHz chip juicing the imagined 4G iPhone Ultra.

The CTIA stars and future iterations of the iPhone are just the first wave of superphones, and there'll be more super capabilities to follow once Verizon inaugurates its own 4G service later this year, followed by even more superphones from AT&T when it launches its 4G network in 2011. Obviously, no phone booths are needed for this change.

The stars at CTIA were the Sprint HTC Evo the first 4G handset, running on Sprint's growing WiMAX network and Samsung's Android 2.1 Galaxy S 3G.

Just a few of the goodies with the superphones:

• 1 GHz processors
• The Evo is a mobile hotspot. Read that again: It's a cell phone and a mobile hotspot.
• The Evo can power up to eight additional 4G connections with peak download speeds of more than 10 Mbps, peak upload speeds of 1 Mbps, and average download speeds of 3-6 Mbps — all two or three times faster than 3G.
• The Evo has a front-facing camera/camcorder, presumably for face-to-face video chats with other Evo users.
• And, the Evo can quickly download HD video content, wirelessly stream HD video to an HDTV, and download streaming HD videos from YouTube.
• The Galaxy and Evo both can record video in HD, and have 16GB of internal memory.